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China's Strategy and Aggression in the East and South China

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China's Strategy and Aggression in the East and South China CHINA’S STRATEGY AND AGGRESSION IN THE EAST AND SOUTH CHINA SEAS: HOW MUCH OF IT IS DRIVEN BY UNDERSEA OIL AND NATURAL GAS? by Zachary W. Zoller A research study submitted to Johns Hopkins University in conformity with the requirements for the degree of Master of Arts. Baltimore, Maryland December 2019 © 2019 Zachary W. Zoller All Rights Reserved ABSTRACT Chinese aggression in the East and South China Sea has been a flash point for Pacific affairs since the 1960’s. As China’s economy increasingly needs oil and natural gas resources, how much of China’s aggression and/or claims in the area are due to the existence of oil and natural gas resources? This research identifies the theoretical background behind national strategy and energy strategy, and collects data about Chinese national strategy, the energy resource metrics (historical and present) specific to China and the East and South China Sea, and the evolution of the conflict in the area. Much research exists around these separate topics, in general and specifically focused on China. Identifying general national strategies, how countries execute those strategies, and the theories behind energy as a driver of national strategy will build a framework from which to review the current Chinese energy security situation and identify the effect this has on its strategy in the South and East China Seas. The results showed that while oil and natural gas may look like a main driver of the conflict, and may actually be a partial driver, Chinese national strategy does not align with the idea that oil and natural gas resources are the main driver for their aggression in the area. The identified economic and energy market metrics show that the resources gained by China claiming the South and East China Sea pales in comparison to their needs, the lack of progression in extraction of these energy resources shows the difficulty in extraction, and the conflict timeline dispute that energy is a driver. Review committee: Dr. Christina Lai and Professor Oliver Fritz ii CONTENTS ABSTRACT ........................................................................................................................ ii INTRODUCTION .............................................................................................................. 1 LITERATURE REVIEW ................................................................................................... 2 POLICIAL IDEOLOGY, NATIONALISM VS. GLOBALIZATION ........................... 2 Nationalism .................................................................................................................. 2 Globalization ............................................................................................................... 4 Regionalism ................................................................................................................. 5 POWER PROJECTION, HARD POWER VS. SOFT POWER ..................................... 6 GEOPOLITICS OF ENERGY ........................................................................................ 9 LITERATURE REVIEW SUMMARY ........................................................................ 11 METHODS ....................................................................................................................... 12 DATA ............................................................................................................................... 13 CHINA’S HARD POWER ........................................................................................... 13 CHINA’S SOFT POWER ............................................................................................. 16 OIL AND GAS IN CHINA ........................................................................................... 19 Energy Sector Summary ............................................................................................ 19 Consumption .............................................................................................................. 21 Production .................................................................................................................. 22 Imports ....................................................................................................................... 22 Exports ....................................................................................................................... 23 Reserves ..................................................................................................................... 24 Transportation ............................................................................................................ 24 SOUTH AND EAST CHINA SEA OIL ....................................................................... 25 SOUTH AND EAST CHINA SEA DISPUTE EVOLUTION ..................................... 27 DISCUSSION AND CONCLUSION .............................................................................. 29 ALTERNATIVE EXPLANATIONS AND FURTHER RESEARCH ............................. 32 APPENDIX ....................................................................................................................... 34 APPENDIX 1: Map of South China Sea with 9 Dash Line .......................................... 34 APPENDIX 2: Map of South China Sea and southern East China Sea ........................ 35 APPENDIX 3: Map of oil licensing blocks in the South China Sea ............................ 36 APPENDIX 4: A list of historically relevant activity in the South and East China Seas from 1974 through 2019 ................................................................................................ 37 BIBLIOGRAPHY ............................................................................................................. 40 Curriculum Vitae: Zachary W. Zoller ............................................................................... 43 iii INTRODUCTION Recently, the South and East China Seas have been identified as a flashpoint in the geopolitical sphere as an area that has become ever tumultuous. China has claimed the area based on historical rights dating back to the Xia dynasty (21st through 16th centuries BCE) and reaffirmed in the 1960’s.1 In general, the region that China claims is bound by a nine-dash line, covering what is currently the entire South China Seas bound on the west by Vietnam, the south by Malaysia and the east by the Philippines (see Appendix 1)2. In addition to these claims, China has claimed the area continental shelf off its coastline in the southernmost reaches of the East China Seas north of Taiwan, and area claimed by both Taiwan and Japan (see Appendix 2)3. China has set their sights on making further headway towards legitimizing their claims to these regions, an area that consists of mostly international waters and is contested on all sides by neighboring countries. Much has been written about the security implications for this activity, specifically with regards to the assumed Chinese strategy of regional dominance and Anti-Access/Area Denial (A2AD) which would create a standoff area between threats and mainland China, and would increase the general influence of the Chinese government over the area. This paper will take a turn from the strict military aspect of this topic, and instead look at the implications and affects that energy has had on this conflict. More specifically, how has China’s need for increasing amounts of energy and their focus on 1 Dingli, Shen, Elizabeth Economy, Richard Haass, Joshua Kurlantzick, Sheila A. Smith, and Simon Tay. 2019. “China’s Martime Disputes.” Council on Foreign Relations. 2019. https://www.cfr.org/interactives/chinas-maritime-disputes?cid=otr-marketing_use- china_sea_InfoGuide#!/chinas-maritime-disputes?cid=otr-marketing_use-china_sea_InfoGuide. 2 CIA. 1988. “9 Dotted Line.” https://upload.wikimedia.org/wikipedia/commons/c/ce/9_dotted_line.png. 3 Park, Katie. 2016. “Map of South China Sea Line.” NPR. https://www.npr.org/sections/thetwo- way/2016/07/13/485814417/chinese-official-on-tribunal-ruling-its-nothing-but-a-scrap-of-paper. 1 securing that energy from threats affected their strategy in the area? For this research, energy security will be defined as a country’s ability to access readily available and reliable energy resources at a volume and price that suits it’s economy’s requirements. LITERATURE REVIEW POLITICAL IDEOLOGY, NATIONALISM VS. GLOBALIZATION Nationalism The well-regarded Anthony Smith identifies five different usages of the word. The first is focused on the, “process of formation, or growth, of nations4.” This definition or usage for the term is the most distinct from Smith’s the other four definitions because it is the only one that addresses nation formation. The second definition is “a sentiment or consciousness of belonging to the nation5,” which, while more similar to the final three definitions in that it is not necessarily about the formation of nations, it is a more theoretical notion than the others. A country’s population can feel a sentiment of collective consciousness without necessarily having any other traits of a solidified nationalistic country, and vice versa. The third involves, “language and symbolism of the nation6,” and the fourth references “a social and political movement on behalf of the nation7.” While important terms to consider when judging the nationalistic character of a country, these will not be the basis for considering the usage of the term with respect to this topic. Both of these references to nationalism
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